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Korea shares closes up sharp 3.9 pct on summit

SEOUL: Share prices on South Korea's benchmark index ended nearly four percent higher on Monday as investors welcomed the government's announcement of a South-North summit in June, analysts said.

Shares rose in a wide range of companies likely to benefit from stronger relations between the two Koreas and telecoms were made big gains.

The benchmark Korea Composite Stock Price index (KOSPI) closed up 32.79 points or 3.92 percent at 870.17. "News-starving investors reacted strongly to the announcement," said Kang Shin-woo, a fund manager with Templeton Securities. "They went looking for companies likely to benefit."

On Monday morning, the government announced President Kim Dae-jung will meet North Korea's reclusive leader in June for a historic summit between the two countries to be held in Pyongyang.

The construction sector jumped 13.65 percent on hopes for greater business opportunities.

Hyundai Engineering and Construction hit its daily maximum limit of 15 percent to 4,715 won.

Fertiliser makers also chalked up notable gains, bolstered by the same theme of prospects for sales to come from stronger relations with North Korea.

Agricultural chemicals maker Kyungnong closed up 14.7 percent at 15,650. Further boosting the main exchange was strength in high-flying telecoms with top mobile phone service provider SK Telecom up 13.20 percent to end at 3.79 million won.

Dacom, a fixed-line telephone and Internet service provider, closed up 9.49 percent at 277,000.

Analysts said the main board may retreat on Tuesday as strong impact from news of the planned North-South summit between the two Koreas will likely subside.

TECH SHARES ON KOSDAQ SPARKLE

Analysts said on Friday's rally on the tech-heavy Nasdaq composite index sparked strong buying of high-techs on the Kosdaq over-the-counter market.

The buying spread to other sectors, driving the index up 8.55 percent to 223.58.

Serome Technology, a software developer and Internet service provider, ended up 11.88 percent at 61,200.

Locus, a computer telephony integration firm, was up 11.7 percent at 143,000.

In the broader market, foreign investors bought a net 182.3 billion won worth of shares, while retail investors bought a net 162.0 billion won worth.

Domestic institutions sold a net 329.2 billion won worth of shares.

Trade volume totaled 325.3 million shares, recovering sharply from on Friday's 205.1 million shares.

Trade was valued at 3.59 trillion won compared with 2.55 trillion won on Friday.

Advancers outpaced decliners 734 to 118 with 36 shares unchanged.

June Kospi futures: closed up 4.50 points at 111.20, while the underlying Kospi index was up 4.23 points at 110.06.-Reuters